The issue that the question highlights is that a particular company with the name Fresh Connection has been trying to improve the non-financial and financial performance by the engagement in the strategic management of the supply chain processes.
In order to understand the strategic management of the supply chain of the particular mentioned company the meaning of the term supply chain must be understood. The term supply chain refers to the sequence of processes that effectively involve the decision making and execution of several business operations and the flow of material, cash and information for the purpose of meeting the needs of the customers. It must be noted here that these processes and flows happen at the different stages of the continuum starting from the production or manufacture till the final consumption of the product. The essential components that are included in the supply chain are the suppliers, retailers, producers, transporters, consumers and warehouses (Fahimnia, Sarkis & Davarzani, 2015).
The supply chain strategy management of the company that has to be prepared is essentially a juice company. Hence, the particular strategy in relation to the supply chain management that should be adopted in regards to the inventory or stock of the company is the execution of proper inventory management. It is the primary duty of the management to determine whether to maintain any safety stock and the particular amount of safety stock that has to be maintained in order to prevent the loss incurred on sales and to effectively minimize the costs that have to be carried forward in case of excess inventory. Thus, the particular techniques that should be adopted in order to ascertain the optimal amount of safety stock applicable for a particular business is the fixed safety stock method, time based calculation method and statistical calculation method. The disadvantages that are incurred by a manufacturer firm that maintains a low safety stock is more than the disadvantages that are faced by a manufacturer firm that maintains a high safety stock. Nevertheless, the particular recommendation for such a case is the calculation of the optimal amount of safety stock that has to be maintained (Wu, 2014).
The next strategy related to the supplier chain management is that the supplier selected for business should be proper and the agreement prepared should be free of errors. This can be facilitated by the preparation of a supplier selection scorecard. The essential indicators that the scorecard would highlight could be the characteristics of the supplier along with the strategic alignment factors that has been considered important by the management. The next indicator could be the agreeableness with the crucial business policies by the supplier and the issues or constraints associated with that particular supplier. The preparation of the scorecard would in all probabilities help the management to filter out the suppliers who do not match the criteria of the scorecard or have acquired very poor ranking in terms of the indicators inserted in the scorecard (Ross, 2016).
The next strategy in regards to the supply chain management is the improvement of the particulars in relation to the production capacity of the company. The business strategy that could move business towards a positive turn in terms of the production capacity would be the movement of facility to a particular low cost country, export of a selected batch of production via a selected group of suppliers and maintenance of the capacity to demand ratio. The other particulars that may be improved are the rate of equipment utilization, increase in the storage capacity and the time period of working shifts of the employees (Ross, 2016).
The next management strategy that may be implemented by the administration of the company is in regards to the improvement of the value proposition of the product that is promoted by the company. The different aspects of a product that may be improved in order to increase its value proposition is the time utility, form utility and quantity utility of the product (Stevens & Johnson, 2016).
The supply chain management strategy that might be implemented by the company for the purpose of improving the performance of the company is related to the production policy of the company. The production policy should be designed in such a way that it effectively reduces the cost that is related to the overall production and management. A suitable production policy might be achieved by the development of a decision making model. This particular decision making model would facilitate the selection of the optimal production rate in a single state supply chain that is featured by the flexibility of the volume (Stevens & Johnson, 2016).
Lastly, the supply chain management strategy that has to be implemented in the company is the use of the demand forecasting tool. In relation to supply chain management there are three major types of forecasting that are supply forecasting, demand forecasting and price forecasting. But in case of the selected company being a manufacturing company it is recommended that it opts for demand forecasting. This is because of the numerous advantages that is provided by demand forecasting like increased customer satisfaction, inventory stock out reduction and improved management of the particular process of shipping the products (Meixell & Luoma, 2015).
The particular issue that has been highlighted in this question is that the explanation of the ways in which strategic risk management has been useful in the management of the supply chain disruption.
The primary step in developing a risk management framework is the identification of the particular risks that disrupt the supply chain and the methods by which the risks can be mitigated.
The major risk that can disrupt the supply chain is the risk of contamination. Being a juice company the risk pertaining to the contamination of the product is an obvious risk that the company is exposed to. Such a risk may be prevented by the utilization of proper antioxidants or other chemicals that have been approved by the food regulating bodies (Hofmann caes et al., 2014).
The risk of the spread of a pandemic disease may also disrupt the supply chain. Thus, quick availability of the proper equipments that may store the finished goods in case of such an emergency should be ensured so the degree by which the business is affected is minimized.
Loss of power is another risk pertaining to the disruption of the supply chain. The availability of a substitute source of power should be made available in order to ensure that the supply chain is not disrupted (Qrunfleh & Tarafdar, 2014).
Loss of water is another potential risk that may effectively hamper the supply chain continuum. The food industry is hugely dependent over the agricultural industry. Thus, natural disaster like floods or tsunamis will disrupt the supply chain. A particular prevention process in such a case would be the maintenance of a financial reserve. However, the issue of scarcity of water can be prevented by utilizing the conservation methods like rain water harvesting, decrease in the waste water volume and increase in the efficient use of water (Zhou caes et al., 2014).
Loss of IT is another major risk that may disrupt the supply chain. IT being a major component of any business the loss of IT will effectively hamper business. Instances like breach of security or any kind of discrepancy in relation to the customer data can be summed up as loss of IT. The particular solution that is applicable to such a situation is that the access to all the business portals should be restricted to the core management group. Furthermore, the backing up of crucial customer data should also be executed for the purpose of reducing the risk (Zhou caes et al., 2014).
Loss of logistics is a particular area where all businesses incur a certain amount of loss. The loss of logistics might be reduced by the practices like the proper packaging of the product, the proper labeling of the freight and choosing of the suitable transportation partner or carrier.
Unexpected economic forces are another potential risk that has the ability to disrupt the supply chain management. This phenomenon can be explained by the particular instance when the unexpected fall in the demand for a certain product results in excess supply or excess inventory which has to be stored in the warehouses thus, hampering the supply chain. Therefore, the particular recommendation here is the computation of the accurate amount of the safe stock that would help in minimizing this particular risk (Zhou caes et al., 2014)
The risk that can disrupt the supply chain next, is less than expected return from the investment on the supply chain technology. The risk that is associated with the low returns from the supply chain technology can be effectively minimized by the proper establishment of the expectations by the management in respect of the returns from the implemented technology; the accurate evaluation, examination and finally selection of the correct vendor; effective implementation of the technology and the exact measurements that depend on the particular employed application (Roh, Hong & Min, 2014).
Lastly, the risk that may disrupt the supply chain is the increase in the price of the raw materials. The increase in the price of the raw materials will potentially lead to the increase in the cost price of the product which will in turn disrupt the supply chain. The particular risk can be mitigated or prevented by maintaining an optimally profit margin that is incurred from selling the products so that the increase in the raw material of the product do not necessarily result in a loss. (Wiengarten 2016)
References
Fahimnia, B., Sarkis, J., & Davarzani, H. (2015). Green supply chain management: A review and bibliometric analysis. International Journal of Production Economics, 162, 101-114.
Hofmann, H., Busse, C., Bode, C., & Henke, M. (2014). Sustainability?related supply chain risks: conceptualization and management. Business Strategy and the Environment, 23(3), 160-172.
Meixell, M. J., & Luoma, P. (2015). Stakeholder pressure in sustainable supply chain management: a systematic review. International Journal of Physical Distribution & Logistics Management, 45(1/2), 69-89.
Qrunfleh, S., & Tarafdar, M. (2014). Supply chain information systems strategy: Impacts on supply chain performance and firm performance. International Journal of Production Economics, 147, 340-350.
Roh, J., Hong, P., & Min, H. (2014). Implementation of a responsive supply chain strategy in global complexity: The case of manufacturing firms. International Journal of Production Economics, 147, 198-210.
Ross, D. F. (2016). Introduction to e-supply chain management: engaging technology to build market-winning business partnerships. CRC Press.
Stevens, G. C., & Johnson, M. (2016). Integrating the supply chain… 25 years on. International Journal of Physical Distribution & Logistics Management, 46(1), 19-42.
Wiengarten, F., Humphreys, P., Gimenez, C., & McIvor, R. (2016). Risk, risk management practices, and the success of supply chain integration. International Journal of Production Economics, 171, 361-370.
Wu, T., Wu, Y. C. J., Chen, Y. J., & Goh, M. (2014). Aligning supply chain strategy with corporate environmental strategy: A contingency approach. International Journal of Production Economics, 147, 220-229.
Zhou, H., Shou, Y., Zhai, X., Li, L., Wood, C., & Wu, X. (2014). Supply chain practice and information quality: A supply chain strategy study. International Journal of Production Economics, 147, 624-633.
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